The Swiss franc’s days as a safe-haven trade could be numbered if the SNB gets serious about stemming its rise.Where might money flow instead?
Try Sweden and Norway.
The Swedish krona and the Norwegian krone are both up on the dollar this year, but have demonstrated ambiguous performance against the euro this year.
That could change if investors suddenly flocked out of Switzerland.
Kasper Kirkegaard, a currency strategist at Danske in Copenhagen, told Reuters, “There’s definitely a case for increased safe-haven flows into the Scandies but we think this will only happen in a moderate risk environment.”
This could be that environment.
Sweden and Norway are among the most stable countries in the world, both of which have growing budget surpluses and some of the lowest CDS rates in the world. Norwegian politicians are already contemplating measures to stem would-be appreciation.
The Danish krone could also be a good bet. It’s up on both the dollar and the euro year-to-date.